State takeover of PG&E needed
PG&E has one job, and it isn’t keeping your lights on or preventing your house from burning to the ground. As a corporation, PG&E’s one job is to return a profit to its investors.
That’s not a reason to get angry at PG&E, it is just a result of the way it is structured. It would be like getting angry at a cancer cell for making you sick — that’s what it does by definition.
But there is no reason that PG&E needs to be structured as an investor-owned utility, delivering profits to shareholders and million-dollar bonuses to executives. Gov. Gavin Newsom has floated the idea of turning PG&E into a public utility.
Some might argue that PG&E is a heavily regulated company with a public rate setting process at the California Public Utilities Commission. But the fact is, PG&E still has a monopoly over most electricity customers in Northern California. Without competition, the utility has little incentive to improve its aging infrastructure.
Others might argue that public ownership won’t be any better for PG&E. But let’s look at some other utilities and the ways they are structured to see if there is any comparison to PG&E.
Utilities delivered to our homes include water and sewer, gas and electric, and telephone, cable and internet.
In Petaluma, water and sewer lines are owned by the city, which sells you water from Sonoma Water, another public agency. All the profits earned are invested in maintaining the infrastructure, not paying shareholders, and few people complain about the way government runs this utility.
Telephone, cable and internet providers are for-profit corporations, but they differ from PG&E because the consumer has a choice of several companies. Don’t like AT&T? Switch to Comcast. The competition will drive these companies to innovate, improve and earn your business.
PG&E is a for-profit corporation with no rival. Even if you buy your power from a community choice aggregator like Sonoma Clean Power, it is still delivered over lines owned by PG&E, the only game in town.
And about those lines. While we have figured out for the most part how to underground water, sewer, gas and fiber optic cable lines, we still erect wooden poles and string live electric wires through forests of trees above dry brush, the same way we have for 100 years.
PG&E obviously did not create climate change, which warmed the region, adding dangerously arid tinder to the landscape and intensified so-called fire weather. But the utility’s solution is to shut off power, disrupting the lives and economy of millions, to prevent burning down the state.
California deserves a more nimble utility, one that can keep the lights on without torching our homes. We will be watching closely what the state ultimately does with PG&E, whether it is broken up or taken over as a public operation.
We’ve let the free market have a go and clearly it is not working. It may be time to see what the public sector can do.